Summary
The Contemporary Collection sells modern furniture, and an array of decorative items like small sculptures, glass art objects, coffee table picture books, artificial flower arrangements, sofa throws and pillows, and contemporary dishes, among others. The company has dominated the home-furnishing business for over 15 years. Nevertheless, the last three years saw the emergence of a home furnishing chain store, which led to The Contemporary Collection losing the majority of its customers. After talking to some of the customers, they blamed The Contemporary Collection for not keeping pace with the changing fashions in home decoration and furniture. The customers also argued that the chain store offered several customer services, which made them prefer the store. After evaluating The Contemporary Collection, the leader realizes that employees responsible for purchasing decorative items and furniture have been buying from the same group of suppliers for a long time.
Moreover, he finds out that the sales team does not advise the buyers on the modern items they deserve to purchase. Lack of cooperation between the salespersons and buyers contributes to current poor performance. To help The Contemporary Collections to regain its past glory, the management ought to make several changes. This paper will discuss some of the changes that the company needs to make.
Effects of cognitive dissonance and biases
Cognitive dissonance theory posits, “A powerful motive to maintain cognitive consistency can give rise to irrational and sometimes maladaptive behavior” (Festinger, 1957, p. 23). Cognitive dissonance led to the owner of The Contemporary Collection and other managerial staff overlooking the fact that the company was not doing well. The Contemporary Collection had dominated the market for over 15 years. During this period, there was no competition leading to the company establishing a steady consumer base. The management became complacent with the market, and it was reluctant to change its operational strategies. The owner did not believe that changing operation practices would help the company to perform better than it did. Hence, he was not ready to make any changes. For the entire period that the company dominated the market, the managerial staff relied on a team of buyers and suppliers who supplied the company with the required products. Hence, the managerial staff could not imagine that the company’s buyers and/or suppliers contributed to the company’s poor performance. For the managerial staff, they perceived it as the normal market variation, which could last for a short period.
Steps to stimulate a better understanding of the store’s current operations
Understanding the prevailing position of an organization would go a long way towards helping the management team to take necessary measures in areas that do not meet the required standards. The owner of The Contemporary Collection ought to take several steps to help the managerial staff and employees to understand the current position of the business. Two critical steps that the owner should take are performance referents and performance appraisal (Murphy & Cleveland, 1995). Performance appraisal will help the management to determine if the company is performing as expected. The owner, in collaboration with the managerial staff, requires analyzing the company’s profit and comparing it with previous years’ profit. This will help them to understand if The Contemporary Collection is losing its ground in the market. It is hard to tell if a company is performing without analyzing its financial or sales records. Hence, to stimulate a better understanding of the current position of The Contemporary Collection, the owner must analyze the company’s financial and sales records.
Apart from conducting a performance appraisal, the owner also needs to conduct performance referents. Murphy and Cleveland describe performance referent as, “A benchmark used to make sense of an organization’s standing along with a performance measure” (1995, p. 18). For instance, the owner of The Contemporary Collection may compare the company’s current profit margin with that of the previous year or the chain store. Such an endeavor would stimulate a better understanding of how the company is fairing. The owner of The Contemporary Collection requires using numerous performance referents for all the stakeholders to understand how the company is performing. For instance, the owner may divide the managerial staff into groups and request each group to analyze a single performance referent. Later, all the groups would pool their findings together to help the stakeholders have a clear picture of the company.
Conducting performance appraisal and referents would help the owner of The Contemporary Collection and other stakeholders to understand how the company is performing. Moreover, it would help to identify areas that they need to address. One of the factors that hinder organizational decision-making processes is the lack of an understanding of how the company is performing (Murphy & Cleveland, 1995). For companies that do not face stiff competition, the management does not understand if they satisfy consumer needs as they keep on coming back. This underlines the reason why The Contemporary Collection lost many customers immediately a competitor came into the market. Managerial staff in The Contemporary Collection thought that the company met all the customers’ needs until they started losing them to the chain store. Hence, performance appraisal and referents will help the company to understand why many customers prefer the rival company, thus implementing changes to enhance its product lines and sales and service methods.
Ways to enhance the level of learning among employees
People understand organizational learning differently. Today, organizational learning focuses on the group and individual revolution through partaking in concrete actions, which alter the way people carry out their duties (Senge, 1994). It instills novel abilities in staff that assist them in refocusing on the organization. To enhance the level of learning among the employees in The Contemporary Collection, one should use the five learning disciplines devised by Peter Senge. One of the steps that would assist employees in learning about the company is a promotion of personal mastery. The managerial staff should help individual employees to establish a personal vision. They have to assist each employee in evaluating their vision based on the prevailing market state. Helping individual employees to establish and work on personal vision will make the employees refocus on the company and devote all their time to achieving organizational goals.
Apart from focusing on personal mastery, The Contemporary Collection should also work on mental models. Senge (1994) defines mental models as “ingrained assumptions and ways of thinking held by individuals and organizations” (p. 35). One reason why the company loses its customers to the chain store is the failure of the purchasing team to look for alternative suppliers who offer state-of-the-art products. They depend on traditional suppliers who are reluctant to introduce new lines of decorative products and furniture. Helping the purchasing department to understand that relying on a single set of suppliers gives the chain store a competitive advantage would lead to them looking for alternative suppliers who offer modern products. Besides, working on mental models will help to promote cooperation between sales and purchasing departments as the two will appreciate the role of each other in enhancing organizational performance.
After each employee identifies a personal vision and changes his or her way of thinking, leaders in The Contemporary Collection should then establish a shared vision that is in line with the personal vision of each employee. Managerial staff must bring all employees together to brainstorm on what they wish to achieve as an organization. This will encourage cooperation between departments and a lower rate of employee turnover (Senge, 1994). One of the factors that lead to the company losing its salespersons is the lack of cooperation between the sales and purchasing departments. The purchasing department hardly takes heed to advise that the salespersons give. This frustrates them since the company does not make substantial sales, which leads to the salespersons appearing as if they do not market the products.
To achieve a shared vision, the company should encourage team learning. Team learning is not synonymous with team building. It entails adroit debates and dialogues to assist employees in developing a new problem-solving technique that yields good results. Team learning will give employees working in different departments the opportunity to evaluate their relationship and deliberate on how to enhance their interactions (Senge, 1994). Last but not least, The Contemporary Collection should apply the discipline of system thinking to help its employees to understand the results of their behavior. This will help the employees to determine how their behavior contributes to the current problems facing the company, and work on them.
Model of decision-making
As a leader, one ought to make decisions that meet organizational and employee needs. To make rational decisions, a leader needs to know the different decision-making models. Some of these models include the normative model and the rational model, among others (Simon, 2000). The rational model is the most appropriate in helping The Contemporary Collection to surmount its current challenges. The model entails four steps, which are problem identification, generation of solutions, selection of the most appropriate solution, and implementation and evaluation of the selected solution. To come up with a lasting solution to challenges affecting the company, one will require identifying all the problems that the company encounters. For the case of The Contemporary Collection, one should evaluate all departments to determine their contribution to poor organizational performance.
Failure to gather adequate information at this stage will affect the subsequent stages of the decision-making process. The company will make its judgment based on erroneous and inadequate information. Once the management team identifies all the problems, it should involve employees in generating solutions. Employees understand the organization better than the management team. Therefore, they know the measures that may help them to address the challenges they face in their departments (Simon, 2000). Hence, involving employees to generate solutions to problems facing the company will help to come up with a lasting solution.
The rational model of decision-making entails coming up with a list of solutions and selecting the best from the list. Consequently, to get a lasting solution to the problems facing The Contemporary Collection, the company should select the most effective solution from a list of the solutions the employees suggest. To do this, leaders should evaluate the merits and demerits of all the alternative solutions. In many cases, organizational leaders abstain from evaluating the merits and demerits of all the proposed solutions to evade spending additional energy and time. Moreover, some fear that they might find negative effects on their desired solutions (Simon, 2000). One should implement the selected solution and evaluate it regularly to make sure that it addresses all the problems. Failure to evaluate the solution will lead to the company not addressing all the problems.
Ethical consideration
Organizational leaders need to consider different ethical standards when making decisions. Failure to consider ethical standards may lead to the leaders making decisions that violate the rights of employees or customers. One of the ethical considerations that one should make when designing a new model of learning and decision making in The Contemporary Collection is evaluating the effects of the model on all the stakeholders. A decision is likely to affect the employees, consumers, suppliers, and other stakeholders, no matter how small or big it might look. Hence, it is imperative to evaluate the effects of the decision-making model before using it to make decisions. Besides evaluating the effects of the model on stakeholders, one should make sure that the selected model “conform to what is considered morally right by the society” (Looise, Torka & Wigboldus, 2011, p. 88). The model should be fair, legal, and vigilant of human rights.
It would be unethical for a leader to impose a learning model on employees without considering their interests and rights. To establish a stable learning culture in The Contemporary Collection, managerial staff needs to involve employees in designing and developing a learning model. Besides, the managerial staff should consider if the company can implement the selected model. The company should look for alternative methods that can help to train employees. The Contemporary Collection may even consider hiring professionals to train its employees. For a smooth learning and decision-making process, the company should also consider how self-interests, biases, and personal stance might influence ethical decisions. This will help the managerial staff to consider these factors when designing a learning and decision making model for The Contemporary Collection.
The rationale for the approach
The success of any organization calls for cooperation among the stakeholders. Involving the stakeholders in making decisions on matters affecting an organization makes them feel valued, therefore, pledging their commitment to organizational goals. The rationale behind the use of Peter Senge’s model of organizational learning is its capacity to promote employee creativity and commitment. Besides, the model helps to bring all the employees together to work towards achieving mutual organizational goals. Senge’s model encourages team learning, which promotes cooperation among the staff. The reason for using the rational model in the decision-making process is its capacity to come up with the most feasible decision from several alternative solutions. The rational model gives employees a chance to identify all the possible solutions. The company gets the opportunity to select the best solution by coming up with a pool of possible solutions, thus being able to address all its challenges. The objective of making ethical considerations is to make sure that managerial staff does not make decisions that violate the rights of employees.
References
Festinger, L. (1957). A Theory of Cognitive Dissonance. Stanford, CA: Stanford University Press.
Looise, J., Torka, N. & Wigboldus, J. (2011). Understanding Worker Participation and Organizational Performance at the Firm Level: In Search for an Integrated Model. Advances in Industrial and Labor Relations, 18(2), 87-113.
Murphy, K. & Cleveland, J. (1995). Understanding Performance Appraisal: Social Organizational, and Goal-Based Perspectives. California: SAGE Publications, Inc.
Senge, P. (1994). The Fifth Discipline: The Art & Practice of the Learning Organization. New York: Doubleday Business.
Simon, H. (2000). Rational decision making in business organizations. The American Economic Review, 69(4), 493-513.